JORDAN FERGUSON • email@example.com
Tim Abrams, executive director for KRTA, and Bob Wagoner, former KRTA executive director, were present during the quarterly meeting to talk with local retired teachers about where the KRTA stands in regards to proposed changes to the state's pension system.
The suspension of annual cost of living adjustments (COLAs) for current retired teachers, ensuring the pension system remains funded and keeping future teachers on a defined benefit plan, as opposed to the state’s proposed 401(a) plan, were items Abrams said were of paramount importance to KRTA. Abrams said that changes to COLAs would impact local economies, and changes to a 401(a) plan from the current defined benefit plan might also impact the ability for the state to attract qualified teachers.
“I applaud the governor for looking into this situation. It has been neglected for far too long; we needed to put some attention on the public pensions in Kentucky and he has done that,” Abrams said. “We also need to applaud the general assembly for the money that they put into the system this biennial — it has made a difference and we need to applaud them.
“Our biggest concern comes from how we address this situation. And I think there are good ways to address this situation without taking the extreme measures that we saw in the governor’s plan.”
The suspension of COLAs for five years was the first concern that Abrams mentioned. He said that such a suspension, while perhaps not noticeable immediately, would have longterm economic impacts for retired teachers. Abrams noted that Gov. Bevin has said that if nothing is done to fix the current pension system, it would cost every Kentuckian between $10,000 and $14,000.
Abrams also noted that a 60-year-old retired teacher receiving $3,000 a month would lose over $71,000 during their lifetime if the COLA is suspended for five years. While this would save the state some $3.6 billion over a 20-year period, and more beyond that, Abrams said it didn’t seem fair to make a retired teacher pick up a $71,000 tab to bail out the government’s responsibility.
“I have heard some political leaders say that if we don’t do anything, it is going to cost every Kentuckian $10,000 to $14,000,” Abrams said. “But it is going to cost that retired teacher $70,000. I don’t know where the equity is here … I think that is a little bit unfair to push that cost onto Kentucky’s retired teachers.”
The second thing Abrams noted was keeping the current defined benefit plan, which state employees utilize.
“Everything I have read shows that switching to a 401(a) is going to cost the taxpayers of Kentucky more money,” Abrams said. “And it is going to provide a smaller benefit to teachers when they retire.”
The change also will impact the ability for the state to attract new educators, Abrams said. He offered one example in his daughter, who is a first year teacher. Abrams said that despite her wanting to be a teacher her entire life, she and other new teachers she knows are considering looking at another career altogether, citing what he described as a lack of respect.
Abrams also noted that KRTA wants the board of trustees for the Teachers Retirement System of the state to be maintained in its current form. He noted that TRS, unlike KERS, has an exemplary track record and is one of the best managed public pension funds in the entire country. A big part of this was due, he said, to the fact that the board is made up of retired and currently working teachers who have an active investment in the system.
“TRS is in good shape; their board of trustees has been elected by teachers who are on that board to make the best decisions they can because that is their retirement,” Abrams said. “It is not full of political appointees who are making these decisions. The KERS board has had a lot of those appointees and we see where that has led to.”
Abrams closed by saying retired teachers needed to make an effort to have their voices heard in regard to these issues and educate those in the community about the potential longterm impacts of the proposed changes.
“A lot of the folks in the private sector, your neighbors and your community, might not really know the situation. Help them understand it,” Abrams said. “Your money out of your paycheck contributes greatly to the economy in Kentucky. If they change this program for future teachers, it is going to greatly change the landscape several years from now.
“They are making big decisions here that could affect Kentucky for a long time, and I think it will really damage public education for years and years.”